Innovation Using Ansoff Matrix

Introduction
1. Evaluate the extent to which innovation has driven the development of Innocent from its inception to the present day
To start off with Innocent only had one product which is their renowned smoothie made from squashed up fruits. After entering the market with their famous healthy juice they were able to provide themselves with sufficient finance, in 10 years they were able turn over ?110 million calculating out to ?6m profit. With the additional finance Innocent were able to diversify their product range and widen the scope of their business. This successful turnover led them into creating and developing new products and penetrating into different markets such as,

“Yoghurt thickies”
“Juicy waters”
“Wedged shaped cartons” – Fitting neatly into lunchboxes (entered into the children’s market in 2005)
In relation to the new products that Innocent have introduced it is possible to use the Ansoffs matrix in order to analyse the development of products into different markets and place them into the categories within the matrix.
Source: tutor2u.net
Product Development
Kids smoothies – Instead of appealing to cash rich time poor consumers they have started to bring out new products for kids
Innocent Smoothie– The first product that Innocent launched
Juicy waters– Competing with healthy waters such
Market Development
Yoghurt Thickies
Innocent Smoothies– Trying out new flavours with new fruits
Diversification
Vegetables– Trying to move into the fresh vegetables sector
In order for Innocent to be this popular there would have been certain stages that business would have to have gone through in order to be where they are at the present day. NPD (new product development) would have been a strategy that Innocent used in order to try and see whether or not their first idea was feasible to carry on with. The table below consists of 6 phases that they would have gone through.
StageRelating to Innocent
Strategic logic & AlignmentFirst of all Innocent wasn’t an easy business to set up for the three university friends. As they were young and inexperienced they found it extremely difficult to find financial banking for the business they proposed to set up. 20 banks or so had rejected their business plan due to lack of experienced and knowledge of the sector. Finally after much pursuing they were put in touch with a business angel who invested ?250,000 and who now owns 20% of the company.
Idea generationThe three university students at this stage would have had to look at the current markets and try and find a possible gap that they felt they could penetrate into. Smoothies were a concept they had engaged into.
Concept Development & SelectionOnce they had all of this set in place they needed to develop their idea to be different from any other potential competitor products out there, they made the smoothies from 100% fresh fruit which could be preserved for 14days and still get the same fresh taste.
Programme DefinitionThe idea of the smoothie had originally come from the trio buying ?500 worth of fresh fruit and making them into smoothies then going onto to sell them at a music festival in London. The customers were asked to put the empty bottles in either one of two bins one named “yes” and one named “no”, the question they would be answering was “do you think we should give up our day jobs to make these smoothies” The yes bin was overwhelming so this gave the three entrepreneurs the push they needed to take their idea forward. Giving every consumer “2 of their 5 a day” with one bottle of Innocent.
Design & DevelopmentThe design of the smoothies had to be unique and welcoming to the consumers Innocent also wanted to be a company that built on ethics hence the name. Ethics was decided to play a big part of the business by using fresh fruit for example the banana suppliers have rainforest accreditation, they also strived to try and be carbon neutral and using bio degradable packaging.
ValidationTo try and make sure that customers were willing to invest in the product they had the knowledge from the music festival that customers were interested in their product.
Pre- Commercialization & launchThe launch of their product was on a national level at first finding distribution channels through the market and now there product is stocked at many delicatessens, health food shops and coffee bars. First day they sold 24 bottles from a van.
Innocent were the first company to start selling smoothies which in turn gave them a competitive advantage of being the first on the scene, this gave them allot more experience over the years of operation than other competitors in the market today, factors which play in favour of Innocent are as follows:
Experience– Having years of practice in serving the customers exactly with what they want, also taking on board the customer’s views and opinions to try and increase product ranges but also at the same time satisfy the needs of the consumer.
Scale benefits- Innocent will definitely have this advantage as they will already have bulk order in place and be able to mass produce quicker than any new upcoming smoothie business.
Pre – emption of scares sources- Innocent have key technology and product innovation that makes there smoothies last 14 days from the day of production, so consumers will still get that great fresh taste.
Reputation- In the years Innocent have been operating they have managed to gather a huge client database through emails and feedback this gives them an advantage as they have started to build relations with the customers a long time ago and by listening to what the consumers want and by responding appropriately they are able to keep the interested and having consumers who are brand loyal.
Buyer Switching- As Innocent are big well known business there suppliers would be more than happy to negotiate with them in terms of competitive pricing.
2. Evaluate the extent to which entrepreneurship has driven the development of Innocent from its inception to the present day
As the three young entrepreneurs had a lot to learn about business it was a huge learning curve for them to be thrown into the deep end so fast. Although successful as it is Coca-cola have huge part to play with their ?30m investment into Innocent when sales went down and competitors got tough. Innocent can gain from Coca-Coola distribution channels such as Europe and global distribution something that Innocent wasn’t to geared up with. From being Entrepreneurs they had given 20% away for investment but also taken onboard help and investment from another major drinks company that has been around for a lot longer than they had. On the other hand this could be a partnership between both businesses that could work. Coca-cola can learn how to compete with a whole new style of drinks.
Below is a diagram of entrepreneurial growth cycle which the three young students would have found themselves going through in the early stages when Innocent started up. The diagram will give an insight and relate how the founders of Innocent would have proceeded within each step of the diagram.

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